Crypto-Current (017)

Chapter-2
Cryptocurrency as Critique

§2.0 — What is Bitcoin? In advance of any extraneous appraisal by philosophy, Bitcoin speaks for itself (in numerous ways). The title of Satoshi Nakamoto’s 2008 paper* is an obvious starting point, since it is explicitly structured as a definition. Bitcoin, it tells us, is a peer-to-peer electronic cash system.

§2.01 — Even as the question is held open whether the Bitcoin Event can be confidently identified with the first complete formulation of its virtual mechanism, the importance of this initiatory document can be assumed, beyond all serious reservation. Whatever else it may be, Bitcoin – the text – is a critical episode in the history of philosophical writing. This judgment is in no way diminished by the focused practicality and understatement of its prose. Rather, the contrary.

§2.02 — Each word in this primary definition of Bitcoin, therefore, merits careful attention – as a default – starting with the indefinite article,** a semiotic particle which, despite its multiple dimensions of modesty, nevertheless opens forwards onto a deepening current of substantial controversy, and backwards onto a legacy of digital money systems whose profound historical importance is only very partially vitiated by comparative neglect. Bitcoin is introduced as one instance of a generic set, with an explicit grammatical repudiation of any claim to uniqueness. It is one among many – singled out only by its historical primacy – and partakes fully in the extreme ontological vulnerability of the digital sign, scarcely differentiated from a copy of itself. The secure individuation of the system is something it will have, itself, to build.***

§2.03 — Not only are the four constituents of this definition theoretically absorbing in themselves, they also constitute an intricate, and variously nested, combinatorial or permutational cluster, involving superficially heterogeneous – social, technological, economic, and abstract system-theoretical – terms. It thus opens a door, or doors, into the domain of true syntheses, or irreducible, emergent powers.

§2.04 — The term ‘peer-to-peer’ (henceforth ‘P2P’) is a conceptual lynchpin of exceptional significance. The leverage the term offers to socio-political understanding is, perhaps ironically, peerless. It can be considered, without serious risk of exaggeration, as the key to modernity’s most fundamental tendency, and the supreme expression of its ideological ambiguity, because it asserts absolute formal flatness and equality (of ‘nodes’), while opening to an unlimited substantial diversity of fortune.**** All the complexities of immanent, or critically processed, social arrangements are delegated to it, with a comprehensiveness that tests the very meaning of ‘society’ at the outer edge of its abstraction, where it designates a functional multiplicity of non-specific agents. ‘P2P’ simultaneously captures agency as a node, identity as a connective address, the elimination of concentrated – or ‘transcendent’ – oversight, network sovereignty, and the technicization of political-economic relations.

§2.05 — In the case of Bitcoin, the system of P2P connections is overtly electronic, thus submitted to a technological dependency, with subsequent historical concreteness. In this respect, it is a thing of the mature (or internetworked) phase of electrified modernity, nested neatly within a set of well-ordered techno-historical determinations that locate it in our time. Yet the real abstraction that characterizes the modern historical process complicates this tidy series of embeddings. Electricity is historically concrete, but techno-industrially abstract, as general-purpose power supply.***** Electronics, analogously, while determinate in historical time, corresponds to an indetermination – or abstraction – of heterogeneous signs into non-specific information, exemplified – at the limit – by the commensuration of programs to data in the digital computer.****** In an engagement with Modernity, empirical history is not enough.

§2.06 — Modernity is what happens to history when it ceases to be ‘one damn thing after another’ and succumbs instead to a self-reinforcing trend. ‘Paradoxically’ – with the scare quotes here marking the immensity of the philosophical provocation – the concrete current of modern history is a process of abstraction, exemplified by subsumption into control engineering, with programming as its spontaneous formulation. Electrification and then electronics are decisive thresholds in its course. New units of abstract power, and of information, are indices of irreversible submission, folding the concrete apparatus of production and transmission into an activated system from which there can be no retreat. The system – in each case – is in a very real sense nothing but its parts, but it was not before, and now is, and there is no going back.

§2.07 — Cash is not a synonym for money in general, unless employed with extreme casualness, but its specific difference – already subtle – is dynamically complicated by the Bitcoin innovation. Pre-Bitcoin, cash is economically defined by its independence from all contractual inscription. Since nothing legibly binds cash to its owner, the possessive relation is purely physical, instantiating property as direct material control. To have it is to hold it, or to deposit it within a secure property, where it is physically protected, or at least hidden. Cash changes ownership by changing hands. In the crudity – or primality – of this propertarian structure, based on sheer holding, the virtues of cash are manifested. Its social circulation is essentially anonymous and unrecorded, even if a secondary order of economic registration is imposed upon it. It is thus, in itself, an exemption from the political, which is to say from any and every variety of macro-social answerability. Cash-money is depoliticized and depoliticizing, which means immediately – from the perspective of its critics – that it is inherently anti-social, and affined to criminality. Among the most paradoxical features of Bitcoin is its rigorous adherence to the functional characteristics of cash-money, even though the currency is subsumed without remainder into a system of contractual legibility. If Bitcoin is cash, we have to re-learn what cash is.*******

§2.08 — Finally, Bitcoin is a system. This concluding component of the definition is the most easily overlooked – and dismissed as without content – precisely because it carries the greatest transcendental implication. What a system is, isn’t anything in particular, at all. Rather, a system is that which remains – by necessity excluded – even after a comprehensive enumeration of parts. Any real system is an irreducible individual, a true ‘thing’.******** Critically, individuality is a scale-free concept, assigning reality to an object. It summarizes a meta-stable knot of connectivity, or synthesis. When formulated as a critical proposition: the systematicity of the system is irreducible to any part or parts of the system.

* Satoshi Nakamoto — ‘Bitcoin: A Peer-to-Peer Electronic Cash System’ (2008).
Since 2014, the Bitcoin paper has been tacked on to the Bitcoin blockchain as metadata (where it coexists with a highly-heterogeneous assortment of grafted information). As Morgen E. Peck explains: “Last year, after much debate in the community, the developers who steward the Bitcoin protocol (which is open source) added a new feature that allows users to tack 40 bytes of metadata onto every transaction. […] The Bitcoin blockchain is now littered with all kinds of nonfinancial messages. Valentine’s Day greetings, prayers and eulogies, excerpts from the WikiLeaks Cablegate files, a hash of the complete text of a recently published book about Bitcoin, and of course, the original white paper that describes Bitcoin. All of these live in the blockchain, embedded into transactions. […] Once metadata gets incorporated into a Nakamoto blockchain, it enjoys all the benefits of the peer-to-peer network that curates it. The entries are accessible to anyone on earth who has a computer and an Internet connection. In order to destroy them, you would have to access every computer on the network (and someday, perhaps, even a constellation of satellites). They are impossible to change, and thus impossible to censor. And they carry with them both a time stamp and cryptographic proof of who created them.”

** Deleuze & Guattari condescend to the definite article, identifying it as the grammatical index of a pre-critical unity. They select the indefinite article to formalize reference to blocks of becoming, in a “semiotic … composed above all of proper names, verbs in the infinitive, and indefinite articles or pronouns” (MP 263). (As an aside, we are compelled by – necessarily informal – a-schizoid conceptual etiquette to dismiss the terminological convergence upon blocks as coincidental). Within the discourse on Bitcoin, however, the definite article tends to return – crypto-inertially – as the switch-point into synthetic singularity. A preliminary hint of this function is found in the difference between two questions: “What is time?” and /or “What is the time?” From this example, it is demonstrated that the definite article, on its own, although in a usage that cannot be presumed typical, is able to support the entire tension of ontological difference, and thus of transcendental critique. Perhaps the most prominent contemporary work of this definite assertion sidelines blockchains in the name of the (Bitcoin) blockchain. There is no evocation of commercial pressure that compares to that of the market. Which is still not to have mentioned ‘The Thing’ (a name – Deleuze & Guattari explictly accept – of capital-as-terrestrial-singularity, in distinction to capital as a generic ‘mode of production’). Accelerate the process.

*** This taxonomic modesty will be re-visited, in the context of questions about network effects and their affinity with natural monopoly.

**** No principle has a greater claim to epitomize the modern spirit than formal equality. Any profound revolt against modernity is articulated over against it. It is criticized from the anti-market left for the social indifference betrayed by its (merely) formal equality and, from the anti-capitalist right, for the socially-corrosive (substantive) consequences of its formal equality. Violated moral substance (‘community’) and order (‘hierarchy’) are equally brought to testify against it. This ambivalence is further complicated by encrustation, recorded with especial fidelity by the term peer, as it has undergone progressive generalization from an archaic aristocratic assumption (preserved in the English association of the social nobility with ‘peerage’), through the formality – and thus indeterminacy – of the right, in common law, to be ‘tried by ones peers’ (echoed faithfully in the academic principle of ‘peer review’), to its present, predominantly technical sense, in which the indeterminacy of peer-to-peer ‘nodes’ is associatively tinted by the concretization of formal equality as democratic universality. Since a group of ‘peers’ could be anyone, they tend – by inexorable egalitarian conversion – to eventually be everyone. In this way, an influential co-optation of the language of democracy by flat-network advocacy takes place, for the most part quite innocently, and unreflectively. Formal equality is identified as a democratic principle, which thereby acquires a strictly negative meaning. Definite meaning has by this stage almost entirely disappeared, as attested by the perfection of ideological ambiguity – with ‘democratization’ standing no less for anything than its opposite. It does not seem to have been in the interests of any politically-significant constituency to resists the tendency – even under the implausible assumption that some such resistance to ideo-linguistic entropy was abstractly imaginable.

***** Fernand Braudel’s great study of Civilization & Capitalism includes an illuminating survey of the energy resources commanded by human civilizations in the period immediately antecedent to modernity. The linchpin of energy abstraction – or plasticity – was man, conceived as a source of mechanical power. On the basis of his unmatched versatility, human laboring effort would remain the critical energy transformer until far into the 19th century. Secondary only to man himself in flexibility was the supplementary work of animals, typically bred for specific functions, but available for limited redeployment. Alongside men, a range of other laboring animals – mules, oxen, camels, and horses – converted nutritional calories into work. In Europe, especially, horses occupied an especially privileged place, as reflected by the persistence of ‘horse-power’ as a measure of quantitative industrial effort – i.e. power, or work rate. The metric was introduced by James Watt in the late 18th century, and – by neat historical symmetry – it was the ‘watt’ as an electrical measure of power that would much later displace horsepower from its technical centrality. The only sources of energy available from non-agricultural sources were wind and water, predominantly in the sails of nautical vessels, but also very significantly in the large numbers of mills that composed the earliest mechanical energy infrastructure. Crucially, these power resources were not convertible into a general (or abstract) form. Retrospectively, it is tempting to assign some such role to wood and charcoal, but this is unconvincing due to the very limited range of industrial applications for combustion prior to the switch to coking coal (and the first steam-powered mills). It is only with the ‘industrial revolution’ brought by steam power that a fungible stock of fuel – and thus standardized energy reserves – became available as a comparatively general-purpose power source, of very broad mechanical application. The introduction of the electric turbine represents a technical subsumption of this first industrial energy infrastructure into one of far superior abstraction. All sources of energy supply, when applied to the generator as an intermediate machine, are pooled into a single power reservoir of at least tendential homogeneity. Lenin’s widely-cited definition of communism as “Soviet power plus the electrification of the whole country” appears in context as an empirical-pragmatic – and even nakedly opportunistic – slogan, lending itself to an apprehension of electricity as a socio-political resource, essentially incapable of rising to the level of serious philosophical consideration (thus eliciting a certain condescending humor within the subsequent development of Western Marxism). Yet even in this account, the order of emphasis is sufficient to mark out electricity as a practical abstraction, or fungible resource, whose facilitation of energy quantification at an unprecedented level advances its ‘commoditization’ (in the mainstream economic, rather than specifically Marxian sense). See V. I. Lenin ‘Our Foreign and Domestic Position and Party Tasks’ (November 21, 1920).

****** Processing programs as data enables open-ended recursion, by eliminating the walls of principle that would prevent programs being objects for themselves. ‘Turing-completeness’ or universal computational competence is dependent upon such unbounded reflexivity. A critical point of philosophical entanglement arises at this point. Is it not that, in the terminology of transcendental philosophy, the conditions of possibility for objects (algorithms) are here being objectified (as data), systematically? So is this not, then, the epitome of metaphysical error –– installed in the very germ of the computational machine? In the circuit, objects and objectification reach a plane of consistency. It is in this apparent breach of transcendental demarcation that we encounter the diagonal problem.

******* While the immediate semiotic index of Bitcoin’s success is its tendency to acquire the characteristics of a general concept, over time – it has been speculated – its advance might be marked by nominal eclipse, due to the redundancy of its specific identification. At a certain threshold, Bitcoin becomes simply ‘Internet money’, or even ‘machine money’ (although the latter demands a semantic upgrade of the word ‘machine’ from its colloquial usage as a technological instrument – one that has been already philosophically prepared). Pierre Rochard – in a series of remarks on Twitter – goes further, to suggest that the world will eventually settle simply for ‘cash’. Bitcoin, according to this expectation, inaugurates a new era of coinage.

******** The terminology of individuation, drawn primarily from the work of Gilbert Simondon, is considered here to be systematically substitutable for that of substantive multiplicity (as employed in the joint work of Deleuze & Guattari), and more generally for that of complex adaptive systems as theoretically determined by the Santa Fe Institute and parallel research projects. The ontological significance of these terms lies in their exact coincidence with the designation of real things, otherwise named ‘machines’.

Crypto-Current (016-h)

§1.3 — The philosophy of secrecy fuses with definite practical realities. Bitcoin approaches the model of an ideal agora, at once commercially open and politically closed. It epitomizes the arena of ‘free trade’ in all its innovative radicality and (from the perspective of the left) social aggression. Bitcoin is closed by its intrinsic protection against discretionary modification, and opened by its commercial function. Implicit in the circulation of bitcoins – or any other medium of exchange – is a process of commercial synthesis, latching the crypto-currency system on to something beyond itself. Anybody transferring bitcoins out of their own account, and therefore necessarily into someone else’s, is presumably engaged in an exchange which – since it cannot be realistically imagined as economically tautological (directly swapping bitcoins for bitcoins) – has to swap bitcoins for an extraneous commercial object. Clearly, whatever is exchanged for bitcoins, is priced in bitcoins. When it operates as a currency, Bitcoin is a synthesizer. It cannot propagate without connecting itself to a wider world. The cryptic principle of openness projects a diagonal line.

§1.31 — Since the origins of modernity, a specter has been haunting the world – that of the autonomous industrial economy. This is the same emergent order that has acquired the name ‘capitalism’ in the abstract, tendential, or teleological sense of the word, and – still more importantly – in accordance with its usage as a designation for an always only partially-defined real individual, or terrestrial event. Its signature is a regenerative, or self-reinforcing, intensification of socio-economic disequilibrium, ‘governed’ – or, more strictly, made radically ungovernable – by a fundamental positive-feedback dynamic. ‘Capitalism’ then, as a singular (or ‘proper’) rather than generic (or typological) name, designates the sovereign self-escalation of an innovative entity, defined only by the practical relation of auto-promotion it establishes with – and through – itself. What it is, in itself, is more than itself. Growth is its essence. This is easily said, but – as an irreducible logical anomaly – it is far less easily understood. This does not, however, obstruct its being named. Fernand Braudel writes of “the passionate disputes the explosive word capitalism always arouses.”* Its would-be defenders, typically, are those least inclined to acknowledge its real (and thus autonomous) singularity. Business requires no such awkward admission. This, too, is a crypsis. By inevitable – if often awkward – irony, a species of ‘Marxism’ tends to be regenerated in any systematic promotion of Capital. Even were this not the case, those who consider themselves befriended by Capital would rarely be motivated to pronounce upon the fact.

§1.32 — According to the crudest – and perhaps also most plausible – account of Bitcoin’s inherent political philosophy, it implements a project of algorithmic governance that conforms to the deepest and most essential agenda of modernity, which is to say, of emergent capitalism, in its search for a definitive securitization of commerce against politics. It thus expresses – in contemporary techno-libertarian or crypto-anarchist guise – the primal impulse of liberalism (in its classical sense). As already noted implicitly, it is something most easily seen from outside.

§1.33 — When captured at its zenith of abstraction and technical rigor, the defining proposition of the left is that depoliticization is still politics (and more specifically, a politics). This is not a proposition that can be limited to theoretical clarification. It is a project, and even a prophecy. The anti-political will be re-absorbed into the political, according to this fundamental formula. The whole of ‘class war’ is contained within it. Its complement, on the side of capital, is an equally practical – and no less antagonistic – commitment to escape. The left thus recognizes its enemy, with striking realism, as an emergent – and intrinsically fractured – agent of social dissolidarity. A crucial asymmetry has to be immediately noted. The ‘struggle’ here is not even imaginably one-on-one. Capital is essentially capitals, at war among themselves. It advances only through disintegration. If – not at all unreasonably – the basic vector of capital is identified with a tendency to social abandonment, what it abandons most originally is itself.** That is why the left finds itself so commonly locked in a fight to defend what capital is from what it threatens to become. Bitcoin tells us – more clearly than any other innovation – what it is becoming next, by escaping transcendent governance in principle. Consistent “right wing-extremism”***, automated governance, and unflinching critical philosophy are inter-translatable without significant discrepancy. The crypto-current is a nightmare for the left (rigorously conceived).**** It is other things, but that is the main one. Philosophical phase-change doesn’t happen without a fight, least of all when attempting to route around one.

* Braudel, Civilization & Capitalism Volume I, p.25.

** Marx is not blind to any of this, although he tends to complacently bracket it as a self-destructive contradiction. The Communist Manifesto is especially stark in this regard. Continuous auto-liquidation of the establishment is modernity’s installed regulative idea. Recent history has only confirmed the insight. Capital revolutionizes harder, deeper, and faster than ‘the Revolution’. Its lack of attachment to itself exceeds anything the left has been able to consistently match. Capital’s scandalous immortality is derived solely from its inventiveness in ways to kill itself. There is no serious way in which it could die that is not more intensely effectuated as a functional innovation within itself.
Revolutionary capital proceeds through disintermediation. It bypasses what it marks for extinction. Morgen E. Peck reports on a conversation with Ethereum entrepreneur Joseph Lubin: “‘We will replace insurance companies. We will replace Wall Street,’ he told me. […] Then the list kept growing. Online movie distribution houses like Netflix and Hulu. Gaming platforms like Xbox and Sega Genesis. Messaging services like Twitter. Add to that retirement plans, currency exchanges, voting, intellectual-property managers, and trust-fund disbursers. According to Lubin, everything – really everything – we do on the Internet or via any kind of digital channel is about to undergo a radical change.”

*** The coinage comes from David Golumbia.

**** Bitcoin was invoked on Halloween (2008/10/31), in a research paper published under the cryptic name Satoshi Nakamoto. It had the time format of a horror story. This is not the place to follow the Gothic roads thus opened, however suggestive they initially appear. Most notable, at this point, are the shadow-undercurrents to questions about whether Bitcoin can ever die (or be stopped). Upon intense examination, neither possibility seems to be coherently thinkable.

Crypto-Current (016-g)

§1.20 — When viewed as an episode within a panoramic sweep, the history of Bitcoin almost writes itself. The crisis it inaugurates within political economy appears to have been dramatically predictable. Yet, when the Bitcoin protocol is examined more narrowly, its history – especially its early history – is notoriously puzzling. Fittingly, the story of Bitcoin – in its details – is profoundly cryptic. When scaled to tidal global processes, it appears to arise – as if inevitably – out of the Internet, which itself arose in conformity with the deepest trends of industrial capitalism. Upon finely-grained inspection, however, where the perturbations of contingency are most starkly evident, it emerged from the work of ‘Satoshi Nakamoto’, about whom scarcely anything is known with confidence. The obscurity concentrated in this name cannot be considered coincidental.

§1.21 — While sweeping analogies reasonably invite suspicion, it is nevertheless tempting to compare Satoshi Nakamoto’s place in the history of money to Gödel’s in formal logic. In both cases a tradition accumulated over many centuries, through systematic consolidation and refinement of primitive intuition, crosses a threshold of positive catastrophe, induced by a technical innovation that overthrows previously unquestioned assumptions. Once this passage has been made, what came before acquires the features of a prolonged childhood – an age of innocence and immaturity to which no return is possible. Logicians remained within an Aristotelian outer orbit, dreaming of an analytically grounded mathematics into the early 20th century, before Gödel awakened them.* Prior to Bitcoin, the foundations of monetary theory remained similarly enmired in legacy conceptions, stemming from the concrete history of property representation.** Bitcoin produces credibility, rather than consuming it. In this way it departs radically from the entirety of previous monetary history – or pre-history – while completing it. The word ‘epoch’ is available for the historical periods initiated by such decisive switch-points which – in Nietzsche’s appropriately grandiloquent words – “break history in two halves”. The discovery, or invention, of transcendental arithmetic (Gödel), asymmetric cryptography (PKC), and trustless money (Bitcoin) are all structurally comparable ruptures.

§1.22 — Ruptures are irreversibilities. They are thresholds from which there is no going back. Every rupture is thus a locking, a lock in, or trap-door. The secret of time finds in rupture its principle of integrity, or redundancy. There is no puzzle beyond this (which is merely transcendental philosophy restated).

§1.23 — Secrecy has been an under-developed topic in philosophy. The reasons for this are arguably indistinct from reason itself, as such, and in general. ‘As we shall see’ we might add, insofar as humor is our object. In any case, a story of at least minimal plausibility is not difficult to muster. Secrecy is that which, as a matter of internal necessity, can only ever be under-emphasized, but in the case of philosophy there is immediately more to say. Since its birth in ancient Greece, philosophy has been drawn to the public square, and – according to some historical constructions – even arose there. It tends, strongly and stubbornly, to identify itself as the most elevated form of public reason. Since it is by way of a departure from the Hermeticism of the ancient mysteries that philosophy originated, it is a discipline bound by primordial vocation to exotericism. This cultural ancestry resonates profoundly with the archaic Occidental apprehension of truth as aletheia (or ‘unconcealedness’), and thus as an emergence or extraction from secrecy. In the words of Herakleitos (‘the dark’) – invoking a primordial entanglement between what would become the cultural lineages of philosophy and cryptography – Φύσις κρύπτεσθαι φιλεῖ (“nature inclines to crypto”).

§1.24 — Within the late-Enlightenment consolidation-phase of modern philosophy, whose capstone is the Kantian critical system, the public sphere of intelligence is thematized as objectivity. This is the realm of common understanding, accessibly shared – as a matter of necessary principle – by all rational beings. For instance, there cannot, according to the Kantian construction, ever be a secret about space as such. Space understood transcendentally, as a pure form of objective intuition, rather than as an object itself, cannot contribute to the content of a private experience. A secret geometry is unthinkable, in this sense.***

§1.25 — Bitcoin is an open secret. Despite belonging unambiguously to the history of cryptography, nothing at all about it is hidden (except what lies beyond it). Its basic innovation – the blockchain – is a (decentralized) public ledger, and this now-widely accepted explanatory term is not remotely misleading. In any case, the crucial terminological decision preceded Bitcoin, and was settled decades earlier with the introduction of public key – or ‘asymmetric’ – cryptography (PKC). It is, precisely, cryptographic sophistication that makes the public sharing of critical information (prudently) practicable. This is exemplified by the blockchain, in which the details of every transaction are open to general inspection. Furthermore, full exposure extends beyond the (empirical) content of the blockchain, to its (transcendental) fabric. The Bitcoin protocol is open-source software, its entire code unrestrictedly available for inspection. Such radical openness is only distinguished practically from a comprehensive annihilation of privacy because the access to accounts is securely crypto-restricted, enabling digital ‘wallets’ to function as disguises. The paradoxical culmination – now exhibited – is a cryptographic system without secrets.

§1.26 — The basic current inherited by the Internet tends with irresistible momentum towards the open secret. The system of disguises is, ever increasingly, fully exposed. The Internet epoch, we learn, is the Golden Age of masks. Masks are not designed to be hidden, but rather the contrary. They are exceptionally conspicuous attire, meant for public exposure, to facilitate hiding in plain sight. Privacy turns out to be the reciprocal of an artificial face.

§1.27 — It is only in superficial appearance that publicity and privacy can be simply opposed, which is not at all to suggest that the distinction can be integrated, or that either pole is soluble within the other. PKC definitively settles the relation. The real bond – or synthetic principle – connecting the public to the private is not a generic logical relation, but a cryptographic singularity. There is only privacy at all because this distinction is opaque to public reason. Philosophy – as it has traditionally understood itself – is asymmetrically related to cryptography, from which it is locked out by its (publically) unquestionable commitment to a principle of boundless publicity. The relation is poorly modeled by a tension between the public square and the inner circle – or between a commons, and a myriad vaults – and would still be even had it not been known since the late 19th century that squaring the circle is impossible.**** Already in the Kantian formulation of the transcendental philosophy the secret was distinguished from any type of concealed object. Its redoubt is not to be found in a transcendent mystery. It is located, rather, in the difference between the object and its principle. The secret of objectivity is itself concealed by the feint that leads to its misidentification with a hidden thing.

* Gödelian incompleteness is logically isomorphic with the halting problem in the (Church-Turing) theory of computation, and thus translatable after rigorous transformation into the uncomputable. It establishes a basic principle of unbounded application within the electronic epoch. As a corrective to the extravagant conclusions drawn from this conceptual complex, in relation to the limits of machine intelligence, the work of Jürgen Schmidhuber — on the Gödel Machine — is of special importance.

** It should be noted, in clarification of this analogy, that the conceptual foundations of political economy (pre-Bitcoin) were far inferior to those of mathematical logic (pre-Gödel). The logicism of the Hilbert Program, and of primitive analytical philosophy, while ultimately untenable, at least provided an exact formal basis for its own theoretical elimination. The concept of property, in marked contrast, remains opaque to an almost comical degree. Its dependence upon a legal decision process invoking discretionary judgment essentially resistant to formalization, while convenient – almost by definition – to those wielding political influence, is a stark indication of its radical conceptual insufficiency. Property is reducible neither to legal title, or physical possession of precious substance. The former is a bad abstraction (to political dispensation), the latter an inadequate one (to a crudely naturalized relation). Property is crypto-security, determined by keys.

*** There has been no cultural event more wounding to the persistence of a Kantian fundamentalism than the revolution in geometry attending the rigorous demotion of the Euclidean fifth (or ‘parallel’) postulate, as privately envisaged in unpublished work by Gauss (1813) and Schweikart (1818), mathematically publicized by Bolyai and by Lobachevsky in subsequent decades, generalized to higher dimensions by Reimann (1854), and then cemented into place by its empirical application to the cosmo-physics of general relativity. Kant’s conspicuous deference to Newtonian mechanics, understood as an apodictic (and essentially mathematical) intellectual revolution, sets the stage for the apparent vulnerability of his own position. The critical edifice seemed to have been built upon insecure ‘Euclidean’ foundations. It is proposed here, however, that the retrospective attribution of embarrassment in this case is exaggerated, and follows from a profound misconception concerning the status of the Kantian transcendental aesthetic. Newtonian space provides only an occasion, not a strict model. The Kantian formalization of sensible intuition is less descriptive than telic, or retrochronic. It is the draft for an engineering project. The Gibsonian Cyberspace ‘Matrix’ – in its resilient (because synthetic) Euclideanism – corresponds to a more rigorously Kantian conception.

**** From the mid-19th century, it was understood that the possibility of squaring the circle depended upon the nature of π (pi). The Lindemann-Weierstrass theorem (1882) proves that π is a transcendental number, confirming the insolubility of the problem. It can be seen from this example how serendipitous the name transcendental number turns out to be.

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§1.15 — If money, nevertheless, demands to be discussed, now more than ever, it is because something huge is happening. So, really, how big is Bitcoin? This question – however awkwardly stammered – sets a backdrop to every discussion of the topic. If it could be answered exactly and comprehensively, we would know everything – seriously, everything – at least up to the epistemological horizon of man. Since Gödel, we have known that whatever can be known at all is precisely detailed in some yet-unknown number. Because the blockchain is a transcendental reality criterion, its ultimate summation is necessarily ontologically exhaustive. Whatever it doesn’t – in the end – include, can only be nothing. That is, however, to get ahead of ourselves.

§1.16 — The size of Bitcoin lends itself not to one question, but to several, and all tend to rapid complication. When posed as a vague query, regarding Bitcoin’s importance – or historical impact – the challenge posed is obviously daunting, in the way of all futurology. This does not, however, mean it can be long avoided. The question does not differ in principle from the kind of risk assessment speculative markets are continuously compelled to make (with mixed success, at best). It is, indeed, in large – and predominant – part a bet on the future, of exactly this type. If it is ineluctable, it is because the distribution of potential outcomes involved allows of no neutral position. Whatever happens to Bitcoin will matter to everything. Even the possibility that it might not matter much, matters enormously. Shorting the Bitcoin future already offers enough space to thrive within – or in which to die.

§1.17 — A more highly-resticted – and (at least superficially) simplistically quantitative – version of the question is easier to answer with facile confidence. No more than 21 million bitcoins will ever exist. The scale of Bitcoin is therefore intrinsic to its identity, and inseparable from its value. To purchase a bitcoin is to acquire one 21-millionth (and in fact a little more) of some as-yet incompletely determined ‘X’. On this basis, the immediate value of Bitcoin is analytical, which is to say, an exact re-statement of a quantity already given in its issuance. How much is a stock of 21,000,000 bitcoins worth? Of course, BTC 21,000,000. Naturally, a tautology this crude can at first only appear as nonsense, or – at best – as a semantic evasion. There is, however, nothing trivial about the disturbance it insinuates into the world.

§1.18 — Instead, and especially in the early stages of the currency, a synthetic valuation is called for, as determined by exchange rates. Typically, this will reference the world’s principal reserve currency, the US dollar, as a unit of account. At any point in time, therefore, the entire bitcoin stock has a determinate market value. Estimated in this way, the ‘scale’ of bitcoin amounted to around 70 billion dollars (in late 2018). The complex equivalence between this – comparatively paltry – financial evaluation, and the appeal of the Bitcoin business as a venture capital opportunity, let alone as the core technology of an industrial revolution, presents a challenge of commensuration for which no existing road-map is even approximately adequate. It is unprecedented for the principal infrastructural innovation of a techonomic long-wave to take the immediate form of an investment vehicle. Extraordinary nonlinearity results.

Crypto-Current (016-e)

§1.12 — Bitcoin is inextricable from a practical interrogation of identity, in its social and psychological sense (as ‘personal identity’), but also more fundamentally as that which makes something such that it is not something else. The specific engagement with this concern under the name of the double-spending problem need not distract from its extreme generality, and – beyond generality – its transcendental implication. Bitcoin realizes an experimental ontology and epistemology in the course of a technical re-foundation of transactions (upon the Internet), which involves an abstraction of if not necessarily beyond money. The practical problematics of money and identity, nudged together over the course of decades by cryptographic theorists, have arrived – in Bitcoin – at a stage of radical fusion. For anything ‘simply’ to be certified as that which it is cannot any longer be confidently distinguished from a monetary phenomenon. The new ‘-coin’ suffix operates amphibiously between these previously distinct registers, as the index of an economic-ontological machine. (Big-B) Bitcoin, the system, goes further still. If being able to verifiably be itself makes of anything a unit in a currency system, the system itself is the Being of such beings – the ultimate criterion of credible existence. In the end, the blockchain cannot be subordinated to any principle of reality (whatsoever) that it does not itself authorize.

§1.13 — Since money, even in its most primitive and concrete forms, is already an abstraction – of general commodity – its further mathematical virtualization tends naturally, from the perspective of common intuition, to a certain opacity. To recognize the reality of the virtual stretches human cognitive capabilities into stressed – and often distressing – territory. In addition, money occupies a thematic cross-roads of such diversity and density, that its tangents can appear overwhelming, touching upon everything of human relevance, even prior to the massive dilation of monetary generality that Bitcoin is currently driving, under the sign of the new techonomic ‘coin’.

§1.14 — Perhaps the greatest obstacle to the lucid investigation of money, however, is presented by the fact that it occupies a nexus of extreme sensitivity within evolved human psychology, lodged among our species’ most emotionally-charged perceptions of social relations. Because money is inextricably entangled with questions of reciprocity, it is tied-up intimately with such provocations to outrage as injustice, cheating, exploitation, and unbounded inequality. Such sensitive moral trigger-zones pose a formidable inhibition to dispassionate analysis. Disciplined investigation of money threatens to arouse sentiments of social alienation, and even desecration. There is no theoretical conclusion about the nature of money so cold that it does not appear burdened with concrete socio-political implication. More specifically, the mere conceptualization of money is grasped – once again, with vivid archaic intuition – as inherently consequential with respect to the social distribution of wealth. There can be no valorization or devalorization of money in theory, without an immediate adjustment of social balances, or at least the widespread perception of such. It is only natural, then, that the complement also holds. Even when constrained by a spirit of disinterested empiricism, the study of money is peculiarly vulnerable to ideological temptations. The suspicion that monetary theory is politics in disguise tends towards a self-fulfilling prophecy. Discussions of money drive social apes mad.

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§1.09 — Strictly speaking, Bitcoin has to be unintelligible – or at least incompletely intelligible – because it necessarily delivers more than it signifies. What the word designates vastly over-spills its recuperable (human) meaning. This is a fatality already implicit in the basic conception of distribution, in the sense of systemic decentralization. To bring any such (intrinsically distributed) ‘object’ into focus, as the target for concentrated, comprehensive attention, is impossible by definition. The attempt drives investigation diagonally, into abstraction. It might equally be said – in a manner conducive to the elaboration of critique – that a network is inherently intractable to objectification. As we shall see here, and elsewhere (even, eventually, everywhere else), the translation from epistemological challenge to political provocation takes only the smallest – and least avoidable – step.

§1.1 — The cybernetic consistency of the Bitcoin protocol is simultaneously technological and economic – we might (and shall) continue to say ‘techonomic’. Its achievement is inseparable from an orchestration of cryptographic procedures and financial incentives, such that exploitation of its economic opportunities automatically reinforces its technical operation. The result – which is, once again, inextricable from the concrete fact of its historical existence – is an actual cycle of self-reinforcement, independent of external legitimating authorities. It implements the first commercial regime to be policed – spontaneously – at the level of production. Its ‘miners’ or primary producers are also its final financial arbitrators. Nothing like it has ever been seen before.

§1.11 — There are no doubt innumerable ‘truths’ about Bitcoin, of a kind familiar both to folk intuition and to disciplined traditions of knowledge acquisition – whether first-order (scientific) or second-order (epistemological, ontological, and metaphysical). Such moments of recognition will inevitably provision the discussion to follow. Yet there is more to the topic of Bitcoin and Philosophy than any of this. While Bitcoin is certainly another thing for philosophy to talk about, it is also an entirely other way of ‘talking’ and of doing something that has been considered central to the philosophical enterprise since its inception – the cultural production of truth. Bitcoin establishes – and in fact ultimately is – an operational truth procedure. It is less a philosophical object, therefore, than a philosophical platform, and even a philosophical automatism.

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§1.06 — The rest of the mail composes a separate systematic unit, devoted to introducing the Bitcoin protocol in (a little) more detail. It takes the form of a sub-headed five-point list, striking for its informality. What initially appears as a logical structure buckles significantly under analysis. The second point, for instance, is essentially a re-statement of the first, separated only by distinct emphasis, since the functional completeness of the P2P network and the absence of any need for trusted third parties constitute a single (or numerically identical) accomplishment. The third point, while approximately accurate, might be considered misleading in two ways. While permitting anonymity, the Bitcoin protocol does nothing to positively protect it. The passive facilitation of anonymity is both unremarkable and, from a technical perspective, notably weak (as would later become evident). Satoshi’s two final points are also interconnected, although in this case the articulation reflects a real synthesis – or techonomic advance – rather than mere semiotic overspill or logical redundancy. The socio-technical Bitcoin machine validates itself in the same way it spreads.

§1.07 — Philosophers searching for the systematic order of the Bitcoin protocol in the logical architecture of a list such as this are looking in the wrong place – comically so, one might easily think. The chat is not the code. Yet, everything attending the arrival of Bitcoin is of such monumental philosophical importance that errors of over-reading can still serve as a corrective to neglect. Much more is still being missed than over-interpreted where the Bitcoin phenomenon is concerned. The occurrence is outpacing its sense.

§1.08 — The problem is not that this fragment is being read at all, or with exaggerated attention, but that it is being read the wrong way, insofar as it is considered to be a logically-ordered list, or a table of categories, rather than the linguistic translation of a circuit diagram. Disorder – and ultimately paradox – is the positive attainment of a cybernetic statement.* It is especially notable that Satoshi’s five-point list of Bitcoin ‘properties’ explicitly describes a cycle, ending where it begins, in a return to the topic of double-spending and its effective prevention. This circular formulation, too, is a mark of technical functionality, rather than logical indiscipline. Bitcoin loops back, to close upon itself, because it works (and demonstrates that it works, through actual perpetuation of its existence). ‘Problems’ of self-reference are an operational virtue, requiring positive achievement. The guiding principle is not conceptual comprehension, but machinic closure.

* Fritjof Capra recalls a conversation with Gregory Bateson that captures the mutual entanglement of mechanical and logical circuitousness:
“… when you get circular trains of causation, as you always do in the living world, the use of logic will make you walk into paradoxes. Just take the thermostat, a simple sense organ, yes?”
He looked at me, questioning whether I followed and, seeing that I did, he continued.
“If it’s on, it’s off; if it’s off, it’s on. If yes, then no; if no, then yes.”
With that he stopped to let me puzzle about what he had said. His last sentence reminded me of the classical paradoxes of Aristotelian logic, which was, of course, intended. So I risked a jump.
“You mean, do thermostats lie?”
Bateson’s eyes lit up: “Yes-no-yes-no-yes-no. You see, the cybernetic equivalent of logic is oscillation.”

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§1.02 — It begins in a virtual theater, where a complex play is opening. The topic of identity is itself concealed, as if wrapped in an invisible cloak. It is nothing technical, or even theoretical, but rather the narrative propeller that comes first. “I’ve been working …” the hidden author tells us. The personal pronoun, we understand eventually – if not immediately – refers us to a mask, and to a drama that is yet to unfold. The great conceptual themes of anonymity and singularity first enter the stage, in casual clothes. (Extreme acuity would have been required to notice these themes already foreshadowed in the word “cash”.) This miniature story about time and ‘work’ means far more than it yet seems to.

§1.03 — After the play begins, space remains for a generic definition of Bitcoin – as a “new electronic cash system” or innovative techno-commercial (i.e. techonomic) synthesis, a ‘machine’ in the rich, rather than the narrowly technical sense (because it encompasses incentives) – and also for an initial (two-step) abstract specification of its operational principle, as a “fully peer-to-peer” or true network, which is itself succinctly defined through subtraction, or independence from any kind of “trusted third party”. The deletion of ‘third parties’ or quasi-transcendent overseers – as revealed, retrospectively, in this artificial future – has been socio-historical process, and not mere conceptual speculation. Much has happened over the span of our hypothetical elapsed duration. Boundaries between the inside and the outside have been redrawn many times. What were once scarcely legible hints are ‘now’ lucid indications of realized occurrences, accessible to public designation. Yet even back then – where we still are – it can only have seemed that a great deal was ready to be found. When these words were teased apart patiently, with the surgical tools of a philosophy that was itself – at that very moment – undergoing drastic revision, everything was already here, at least in conceptual embryo.

§1.04 — This short text is unmistakably a fragment about ‘Bitcoin’. It is destined to be still more so. The retrospective concerns of what remain, at the time of writing, unconsolidated interests will insist upon that. Yet the term appears only once outside the heading, in the second sentence, and even there it is not nakedly deployed, but is instead embedded within a hyperlink (or URL). This is surely sufficient excuse for an early digression. The familiarity of Internet links, after what has been, even now, only a couple of decades of wide social dissemination, tends to deprive them – as a general semiotic phenomenon – of the attention they would otherwise command. They are rushed beyond the horizon of awareness by their own smooth utility. The same high-speed familiarization is characteristic of technological adoption in the electronic era, whose futuristic strangeness is thus self-concealing.

§1.05 — Every URL is a technical implementation of rigid designation, which is to say that it works not by saying, but by pointing to some definite thing. It is thus the demonstrative confirmation of a semantic theory, but operationalized to such a degree that its implicit claim is rendered superfluous, through transportation beyond all meaningful controversy. It would be entirely redundant to argue that URLs work. The proper name of that thing meant by any URL can be compressed and mangled to such a degree that its signification is obliterated, yet it works (when – in the case of an ‘unbroken’ link – it does) as an effective invocation – by actually calling up that to which it refers. On the Internet, the conceptual problem of reference has been mechanized. To write using links is to participate in a literal machine. In multiple senses, therefore, it ‘represents’ a death of metaphor.

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Introduction

§1.00 — On November 1, 2008, ‘Satoshi Nakamoto’ introduced his “Bitcoin P2P e-cash paper” in an email to The Cryptography Mailing List:*

I’ve been working on a new electronic cash system that’s fully peer-to-peer, with no trusted third party.
The paper is available at: http://www.bitcoin.org/bitcoin.pdf
The main properties:
Double-spending is prevented with a peer-to-peer network.
No mint or other trusted parties.
Participants can be anonymous.
New coins are made from Hashcash style proof-of-work.
The proof-of-work for new coin generation also powers the network to prevent double-spending.

§1.01 — There is a future, perhaps even a probable one, in which this short text – of just 64 words – has the status of a Pre-Socratic fragment, at least, minutely examined by multiple philosophical schools, determined to extract every last micro-flicker of its significance. In this obscurely envisaged culture to come, these words compose an intricate sign of what is about to arrive, not only caught in the final moment before the shift, but self-identified as a spark – intimately linked to the spark – from which the shift came. It is trawled up from the other edge, where an accumulation of techno-cultural reaction mass is about to go nova. Caught at the very lip of the reaction pile, it is a piece of critical code.

§1.011 — Were the virtual catastrophe to be even greater than it imaginably could be, so that only the first sentence had survived – time-charred by the sheer magnitude of the event – it would still suffice as a compact summary of our entire topic, and as the germ of an intelligible retro-futural tradition. Just seventeen words now, and yet almost everything is still said, arranged in accordance with a distinct internal structure that divides neatly into three parts.

* ‘Bitcoin P2P e-cash paper’ (2008/11/01)

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The next series of Crypto-Current installments, constituting the first chapter of the book (which is also the introduction), will be appearing in print before the end of the month, when Šum magazine is releasing a special Bitcoin edition, also including contributions by Edmund Berger and Paul Ennis.

The version of the text found there will obviously be much nicer, released from ugly blog format, with proper (numbered) footnotes, not to mention appearing in the right order, and emerging in more than irritating chunks.

In order not to tread on Šum’s toes, every effort will be made in the next few days to make your Crypto-Current reader experience as appalling as possible. Chunks will be even further salamified and if any other ideas for maximizing the hellishness of presentation turn up, they will be eagerly seized upon. Thank you for you cooperation. (Irritated comments will be gratefully received.)

Current resumes imminently …